Former Birmingham psychologist gets federal prison, $1.5 million restitution in Medicaid fraud case

Diana J. Smith

A former Birmingham psychologist has been sentenced after defrauding the Alabama Medicaid Agency of at least $1.5 million by filing false claims for counseling services that were not provided.

Sharon D. Waltz, 51, pleaded guilty and was sentenced Thursday to three years in federal prison. She was also ordered to pay $1.5 million in restitution, according to a joint statement by Northern District of Alabama U.S. Attorney Prim Escalona, Alabama Attorney General Steve Marshall and Department of Health and Human Services -Office of Inspector General Special Agent Derrick L. Jackson.

Waltz operated Capstone Medical Resources in a number of locations around the state, with its primary officer in Birmingham. Among other services, Waltz provided individual and group counseling sessions for at-risk youth. The charge against her states that many of the services billed to the Alabama Medicaid Agency were never performed.

She is the former mistress of Jonathan Dunning, the former Birmingham Health Care CEO who was sentenced to 18 years in federal prison for siphoning $13.5 million intended for health care for the poor. Waltz, who worked with Dunning at the BHC clinics, was not charged in that case but did testify against Dunning in the 2016 trial. Waltz has two children by Dunning, who was her married boss at the time. She filed a sexual harassment lawsuit in 2013, but the case was tossed out in 2015.

Birmingham Health Care was one of a nationwide network of federally funded clinics to treat the poor. It is now called Alabama Regional Medical Center (ARMS). Dunning’s release date from a Louisiana prison is Aug. 9, 2032.

Jonathan Dunning

Jonathan Dunning

In the case against Waltz, the Program Integrity Division of the Alabama Medicaid Agency launched an investigation after an audit showed that Waltz’s billings to the Medicaid Agency had increased from $99,000 in 2015 to more than $2.2 million in 2017. The findings of that audit were turned over to the Attorney General’s Medicaid Fraud Control Unit after Waltz submitted falsified records during the audit.

A subsequent investigation was conducted by the Medicaid Fraud Control Unit and the Office of Investigations of the U.S. Department of Health and Human Services Office of Inspector General. That investigation determined that the majority of claims submitted by Capstone from 2016 through 2018 were fraudulent and that Waltz submitted and directed her employees to submit claims for counseling services that never occurred, and in some instances for individuals—including family members and friends of employees—who never received services at all.

A second woman in July 2020 pleaded guilty to conspiracy to commit healthcare fraud involving a former Birmingham-area psychology clinic that defrauded the Alabama Medicaid Agency of at least $1.5 million.

Heidi Elizabeth Robertson, 35, entered her plea in the case that centered on counseling services that were never provided. Authorities say Robertson was the primary biller for Capstone Medical Resources LLC which filed false claims for individual and group counseling services for at-risk youth. She was sentenced to 18 months in November and ordered to share the restitution with Waltz.

The U.S. Department of Health and Human Services OIG, the Alabama Attorney General’s Medicaid Fraud Control Unit and the Program Integrity Division of the Alabama Medicaid Agency investigated the case. Assistant U.S. Attorney J.B. Ward and Assistant Attorney General Bruce Lieberman, working as a Special Assistant U.S. Attorney, prosecuted.

“Waltz’s actions demonstrated reckless disregard for at-risk youth, and she will now face the consequences of those actions,” Escalona said. “Today’s sentence represents the relentless commitment by the U.S. Attorney’s Office and our law enforcement partners to protect the resources dedicated to the members of our community that are the most vulnerable, our children.”

Marshall said, “It is important that Sharon Waltz be fully held to account for engaging in her illegal and immoral scheme to steal from hard-working taxpayers and profit off at-risk children. As Attorney General, I stand committed with our friends in federal law enforcement to seek out and punish anyone who plunders the public treasury and harms those whom they were entrusted to serve.”

“Today’s sentencing should serve as a reminder to everyone who transacts business with federal health care programs, including Medicaid, that those programs are protected by a dedicated team of investigators and prosecutors,” said Jackson. “We will not tolerate fraudulent actors who illegally enrich themselves at the expense of patients and the American people.”

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